Court to rule on fresh bid to halt Sh30b EABL shares sale

The High Court will on May 28,2026 rule on a fresh attempt by a small Nairobi-based beer distributor to suspend the proposed Sh300 billion acquisition of Diageo PLC’s controlling stake in East African Breweries Limited (EABL) by Japanese conglomerate Asahi Group Holdings.

Justice Gregory Mutai of the Milimani High Court on Friday May 8,2026 fixed the ruling date after hearing all parties in what has now become a second round of intense litigation over Bia Tosha Distributors Limited’s bid to halt to one of the biggest corporate transactions in East African history, Diageo's proposed sale of its 65 percent shareholding in EABL to Asahi Group Holdings in a deal valued at approximately US$2.3 billion.

“Having considered the submissions by all parties, the Court will issue its determination on whether the threshold for interim conservatory orders has been met in the circumstances of this application. I reserve this matter for ruling on May  28, 2026,” Justice Mutai stated.

The fresh application by Bia Tosha comes barely a month after Justice Bahati Mwamuye dismissed a near-identical request on April 9, 2026, finding that the distributor had failed to demonstrate any legal or factual link between its long-running distribution dispute and the shareholding transaction it sought to block.

In that ruling, Justice Mwamuye described the application as “fundamentally untethered” from the substantive dispute before the court.

Despite that setback, Bia Tosha returned to the High Court seeking interim protection orders, arguing that without them, the transaction could be completed before its appeal is heard, thereby rendering any eventual success meaningless.

However, lawyers representing East African Breweries Limited, Kenya Breweries Limited (KBL), UDV (Kenya) Limited, and Diageo PLC strongly opposed the renewed application, telling Justice Mutai that the distributor was effectively attempting to achieve through a second filing what had already been rejected by the court.

“This is a classic case of forum shopping. The Applicant elected to go to the Court of Appeal. It must now follow that process,” Respondents' counsel submitted.

They argued that Bia Tosha cannot simultaneously pursue appellate remedies while returning to the High Court seeking identical orders under the guise of urgency.

According to their submissions, the application amounted to a procedural workaround aimed at reopening a matter already determined.

They further faulted the timing of the application, noting that Bia Tosha had waited more than three weeks after the earlier ruling before seeking what it now described as urgent interim relief.

“The Applicant cannot sit on its rights and later ask the Court to treat its own delay as an emergency. That is not the basis upon which conservatory orders are granted,” the counsel argued.

At the heart of the dispute remains a decade-old commercial disagreement dating back to 2016, in which Bia Tosha alleges it paid goodwill of Sh38,298,000 for exclusive beer distribution rights across designated Nairobi routes.

The distributor claims those rights were unlawfully interfered with by Kenya Breweries Limited.

However, the respondents maintain that the dispute has no connection to Diageo’s corporate restructuring or its decision to sell its majority stake in EABL to Asahi Group Holdings.

They argue that the Kenyan subsidiaries remain fully incorporated and operational, and that any change in upstream ownership does not affect contractual or statutory obligations within Kenya.

“The shares are not the subject of the petition,” counsel emphasized.

 “EABL and KBL continue to exist and operate within the jurisdiction. Nothing about the transaction extinguishes any legal rights the Applicant claims.”

The respondents also warned the court against intervening in a transaction of such magnitude at an interlocutory stage, arguing that even temporary orders could have far-reaching commercial consequences.

“It is not a small thing to put a court order over a Sh300 billion transaction,” counsel told Justice Mutai.

 “Such intervention introduces uncertainty into a regulated global deal and sends adverse signals to investors watching Kenya’s treatment of foreign direct investment.”

They further noted that Bia Tosha had not provided an undertaking as to damages, a standard requirement in applications seeking to restrain major commercial transactions.

Bia Tosha, however, maintains that preservation of the status quo is necessary to protect its appeal, arguing that completion of the transaction would effectively render any judgment hollow and unenforceable in practical terms.

Justice Mutai’s ruling, scheduled for May 28 2026, is expected to draw significant attention from both corporate Kenya and international investors, as it will determine whether the High Court is willing to impose interim restraint on a transaction already advancing through regulatory approvals in Kenya, Uganda, and Tanzania, with completion anticipated in the second half of 2026.